In a poll of 348 senior IT executives, 76% reported their budgets either grew (38%) or remained flat (38%) when compared to 2012.
Similarly, 76% of respondents reported department headcounts either grew (29%) or remained flat (47%) in 2013. For those who reported staffing levels grew in 2013, the headcount increased by about 13%; for those who saw a reduction in staffing, the average decrease was close to 14%, according to the survey results. Conversely, only one-fourth reported they were either operating under a hiring freeze (16%) or shrinking by attrition (9%).
The salary survey was launched in September and remained open through October, attracting 1,711 participants in total. Senior IT executives were defined as CIOs, chief technology officers, executive vice presidents, and directors of IT and information security.
Whether information technology budgets in the future are siphoned off by business groups -- remember the prediction about chief marketing officers? -- and all the IT jobs get ported to the cloud or taken over by robots remains to be seen. But for now, reports of the IT organization's demise appear premature.
Indeed, data suggests 2014 will provide another year of stability and even growth for IT departments, with 32% of respondents indicating they're fully staffed and another 39% indicating they're looking to make new hires.
The relative stability and uptick of budgets and headcounts, however, doesn't mean IT leaders have left their penny-pinching ways behind. All the CIOs and IT leaders interviewed for this article, including those whose budgets and staffs increased in 2013, stressed that they continue to look for ways to cut costs without sacrificing service or innovation.
Ups and downs of headcounts
Count Michael Maya, CIO for the city of Wichita in Kansas, is one of the fortunate 29% of senior IT execs whose staffs grew in 2013. In a follow-up interview, he told SearchCIO he was finally able to fill seven positions that had gone unfilled for up to five years. "We just got back to where we were before [the recession]," he said. "Positions went open through attrition, and I pretty much held those open so I wouldn't have to worry about laying people off."
Anthony Peters, director of IT for the San Francisco-based financial services firm Burr Pilger Mayer Inc., had a different story to tell. His headcount decreased in 2013, but that was because of strong market demand, not layoffs. "We started to see the market open up with more opportunities for IT technicians," he said. "One former employee left because the position he was going to was more senior and [it] gave him more authority to make decisions."
Scott Kushner, chief innovation officer for the Langhorne, Pa.-based Voice Systems Engineering Inc., said his headcount remained flat in 2013. That's a statistic that might technically be true for Kushner in 2014 as well, but he also expects to increase the company's use of consultants and contracted positions. It's a strategic initiative backed by company dollars. "Because I'm adding in more consultants, [my budget] will actually go up by 6% to 7% [in 2014]," he said.
Flat budgets aren't necessarily a bad thing
While Kushner will get more money in 2014 for outsourcing, other areas of IT spending will follow the trend at his company since 2012 and will likely remain flat next year. "We're trying to go through a process of cleanup -- [cutting] where we think we spent too much in the past years relative to our size," he said. "So we're trying to organize and prioritize what we choose to work on."
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Maya and Peters echoed Kushner. Both of their budgets remained flat from 2012 to 2013, which neither saw as a bad thing. Instead, budget planning was described by them as a strategic puzzle: How can they improve efficiency while providing better service to the business?
"When you have money to spend, you're not concerned about priorities," Peters said. "IT leaders and CIOs have to be more creative and prioritize more."
Maya agreed. He plans to reduce costs by moving away from point solutions in favor of an enterprise resource planning environment. "I look at it more as a reallocation from a CIO perspective," he said. "How do we provide the same or better services with existing or new technology and still reduce costs so that we're providing better or more services with the same budget?"
An IT leader at a large financial institution who asked to remain anonymous had another name for reallocation; he called it "re-engineering targets."
"As part of the budget, we're asked to look for ways to reduce costs … [and] remove stuff that's no longer needed," he said. Freed up funds are reinvested into new project initiatives for the department. "We had to build a new data center -- that's a $300 million effort. And, over the course of about three years, we built that data center without increasing our operational costs."